First Home Savings Account (FHSA) Canada 2025 — Complete Guide

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The First Home Savings Account (FHSA) is Canada's newest registered account, available since April 2023. It combines the best features of the RRSP and TFSA: contributions are tax-deductible (like an RRSP), and qualifying withdrawals for a first home purchase are completely tax-free (like a TFSA). You can contribute up to $8,000/year with a lifetime maximum of $40,000.

FHSA Savings Projector

Annual FHSA Contribution ($, max $8,000) Expected Annual Return (%) Years Until Home Purchase (max 15) Your Marginal Tax Rate (%)

FHSA Key Rules at a Glance

Parameter	Amount / Rule
Annual contribution limit	$8,000
Lifetime contribution limit	$40,000
Unused room carry-forward	$8,000 (1 year only)
Contribution deductible?	Yes (like RRSP)
Qualifying withdrawal tax	None (tax-free)
Account lifespan	15 years maximum (or until qualifying purchase)
Age requirement	Must be 18 (or age of majority) and under 71

FHSA Eligibility

To open and contribute to an FHSA, you must:

Be a Canadian resident
Be 18 years of age or older (19 in provinces with age of majority 19)
Be a first-time home buyer — you and your spouse/common-law partner must not have lived in a home you owned in the current year or the preceding 4 calendar years

How FHSA Withdrawals Work

Qualifying withdrawals to purchase a first home are completely tax-free. To make a qualifying withdrawal:

You must have a written agreement to buy or build a qualifying home
You must intend to occupy the home as your principal residence within one year
Complete Form RC686 (First Home Savings Account Home Buyers' Plan)

Unlike the Home Buyers' Plan (HBP), there is no repayment requirement for FHSA withdrawals.

  Combining FHSA + HBP: You can use both the FHSA (up to $40,000) and the Home Buyers' Plan (up to $35,000) for the same home purchase. A couple could potentially access up to $125,000 combined ($40K FHSA × 2 + $35K HBP × 2) for their first home.

What If You Don't Buy a Home?

If you haven't used your FHSA to buy a qualifying home within 15 years of opening it, you have two options:

Transfer to your RRSP: Transfer tax-free to your RRSP or RRIF without affecting your RRSP contribution room
Withdraw as income: Taxable like an RRSP withdrawal

The RRSP transfer option makes the FHSA a low-risk proposition — worst case, your contributions and growth simply become retirement savings.

FHSA Carry-Forward Room

Unlike the TFSA, FHSA carry-forward room is limited to one year. If you contribute $5,000 in 2024 instead of the full $8,000, you carry forward $3,000 — making your 2025 limit $11,000. However, if you still don't use that $3,000 by the end of 2025, it is permanently lost.

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